Which of the Following Is an Example of the "Moral

question 14

Multiple Choice

Which of the following is an example of the "moral hazard of health insurance"

• A) an increase in the number of surgeries prescribed for benign prostate disease beyond the point at which the marginal benefit equals the marginal cost
• B) a decreased willingness of individuals to go to the doctor for minor ailments because of increases in coinsurance rates
• C) an underallocation of resources to medical care because of monopoly power of hospitals
• D) experience rating of health insurance groups by health insurers

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Definitions:

Finished Goods

Products that have completed the manufacturing process and are ready for sale.

Job-Order Costing

An accounting method that assigns costs to specific batches or job orders, making it suitable for companies producing unique products or jobs.

Direct Materials

Direct Materials are raw materials that are directly traceable to the manufacturing of a product and are an integral part of the finished product.

Manufacturing Overhead

All indirect costs associated with the production of goods, such as utilities, maintenance, and supplies not directly traceable to a product.